ITEM: PUBLIC HEARINGS

21. CONSIDER APPLICANT’S REQUEST TO RECONSIDER CONDITIONS OF APPROVAL FOR CAÑADA WOODS WATER DISTRIBUTION SYSTEM (POTABLE) – APPLICATION #20021031CAN

Meeting Date: June 21, 2004 Budgeted: N/A

Program/Line Item No.: N/A

Staff Contact: H. Stern, A. Bell, Cost Estimate: N/A

General Counsel Approval: Reviewed staff note.

Committee Recommendation: N/A

CEQA Compliance: EIRs certified by Monterey County in 1994, 1995 and 1996

SUMMARY: The Board will consider a request by the applicant to reconsider the Conditions of Approval to Amend the Cañada Woods Water Distribution System (alluvial-based, potable component) that was authorized by the MPWMD Board at its July 21, 2003 meeting. Exhibit 21-A provides the Final Conditions of Approval and Final Findings of Approval adopted by the Board at its July 21, 2003 meeting. In a letter dated May 7, 2004 (Exhibit 21-B), the applicant’s attorney expressed concern about compliance with Condition #19 and requested that the Board consider deleting Condition #19. Condition #19 requires that separate, complete application(s) be submitted for the non-alluvial, non-potable components of the Cañada Woods water distribution system by September 30, 2003. Specifically, Condition #19 states:

19. On or before September 30, 2003, the Permittee shall file with MPWMD one or more complete applications for new or amended water distribution system permits to authorize existing and proposed production and use of sub-potable water from non-alluvial wells and the use of reclaimed water within the service area of the CWWDS and the Monterra Ranch Mutual Water Company Water Distribution System. These applications shall specify the sources, including non-alluvial wells and treated wastewater, production quantity, and purpose and location of use for each source and category of use. If this condition is not met, the Permit granted herein shall be subject to revocation.

For clarity, the potable portion of the Cañada Woods system that derives its supply from the Carmel Valley Alluvial Aquifer (Application #20021031CAN) is referred to herein as CWWDS#1. In contrast, the non-alluvial, non-potable component of the water system (Application #20030930CWW), which is the subject of Condition #19, is referred to as CWWDS#2. Unless noted otherwise, the information provided below refers to the CWWDS#1 system.

This public hearing is considered to be a continued hearing of the July 21, 2003 application to amend CWWDS#1. The Board may choose to add, delete or amend any condition, not just Condition #19. However, any action must be consistent and in compliance with existing MPWMD Rule 22 (as amended by Ordinances No. 96 and 105), which includes many required findings and conditions of approval for any approved water distribution system. This hearing has been properly noticed by posting, mailing, published agenda and the District website.

As a continued hearing, all materials associated with the July 21, 2003 action must be reviewed by the Board. MPWMD Board members who were not present at the July 21, 2003 meeting have been provided a tape of the proceedings as well as excerpts of pertinent environmental review documents prepared by Monterey County. Under separate cover, the Board has been provided the full staff note for the July 21, 2003 public hearing, which includes the June 16, 2003 staff note for the first public hearing on this matter. Copies of the July 2003 staff note are available for public review at the District office; they are not available on the District website. Exhibit 21-C provides the minutes from the June 16, 2003 meeting. Exhibit 21-D provides the minutes from the July 21, 2003 meeting.

The Cañada Woods Water Distribution System was originally approved by MPWMD in 1995 with specified water production and connection limits, system service area and several other conditions. Application #20021031CAN to amend the boundary of the system by adding 397 acres (20 residential lots), adding a replacement water well, and constructing additional storage and delivery facilities associated with potable water delivery was approved by the MPWMD Board on July 21, 2003, along with 27 conditions of approval. The applicant agreed to all conditions of approval at the meeting.

Though the application was approved, a signed permit has not yet been issued because specific required actions by the applicant to make the permit valid have not yet occurred. These include standard follow-up actions required of all applicants such as paying permit fees, signing an Indemnity Agreement and signing an Acceptance of Permit Conditions form. In addition, Condition #19 required that the applicant submit a complete application for the non-potable, non-alluvial components of the water system by September 30, 2003. An application was submitted, but has been determined by staff to be incomplete to date. The issue of completeness of the non-alluvial, non-potable component of the water system (CWWDS#2) is not the subject of this hearing; it will be addressed based on Board action regarding the CWWDS#1 conditions.

RECOMMENDATION: Staff recommends that the Board not delete Condition #19 as requested by the applicant, and retain all 27 conditions of approval authorized on July 21, 2003. Staff recommends that the language of two existing conditions be refined as described below. The rationale for the staff recommendation is provided in the “Discussion” section.

Specifically, staff recommends that the Board should:

1. Affirm the Board’s intent to uphold MPWMD Board’s action of July 21, 2003, including Final Findings and Conditions of Approval for Application #20021031CAN (Exhibit 21-A) with the exception of two text refinements for Condition #19 and Condition #21-c, described in Recommendations 2 and 3 below. These refinements are based on new information obtained since the July 21, 2003 Board action.

2. Direct staff to amend Condition #19 to delete the word “subpotable” in the third line as shown below in strikeout. This change is needed because water system facility maps submitted by the applicant to the Monterey County Health Department show three non-alluvial wells connected to the potable water system. These three wells were not shown on facility maps submitted with the CWWDS#1 application to the District.

19. On or before September 30, 2003, the Permittee shall file with MPWMD one or more complete applications for new or amended water distribution system permits to authorize existing and proposed production and use of sub-potable water from non-alluvial wells and the use of reclaimed water within the service area of the CWWDS and the Monterra Ranch Mutual Water Company Water Distribution System. These applications shall specify the sources, including non-alluvial wells and treated wastewater, production quantity, and purpose and location of use for each source and category of use. If this condition is not met, the Permit granted herein shall be subject to revocation.

3. Direct staff to amend Condition #21-c to better clarify the method that should be used to provide updated pumping information. This change is needed to help the applicant comply with annual reporting requirements. The revised text should read:

The Annual Water Monitoring Report shall include detailed status of development within the CWWDS service system, analysis of water consumption by individual lots, for each type of use, both individually and cumulatively, and updated projections of future water usage within the CWWDS service area. This report shall also include an annual updated determination of the production capacity of the CWWDS facilities. The method for determining updated well production capacity shall be based on actual pumping rate data (in gallons per minute) collected during the current reporting year, and the method shall be acceptable to the MPWMD General Manager.

4. Direct staff to develop revised Findings of Approval supporting the revised conditions, including specific reference to District compliance with CEQA (section 15096). This means that all voting Board members who have not already done so must review the environmental documents associated with the July 2003 action before final action is taken. These include Environmental Impact Reports (EIRs) and other environmental documents prepared for and certified by Monterey County in 1994-1996.

5. Direct staff to develop Findings of Denial for the applicant’s May 7, 2004 request for formal adoption at the July 19, 2004 meeting, based in part on the rationale provided in the “Discussion” section below.

6. Direct the applicant to submit the necessary information to comply with Condition #19 on or before July 30, 2004.

If the Board chooses to approve the applicant’s request to delete Condition #19, the Board must direct staff to develop the following documents for formal adoption on July 19, 2004:

Ø Findings of Approval for the applicant’s May 7, 2004 request;

Ø Revised Conditions of Approval for Application #20021031CAN;

Ø Revised Findings of Approval supporting the revised conditions, including specific reference to District compliance with CEQA (section 15096). This means that all voting Board members who have not already done so must review the environmental documents associated with the July 2003 action before final action is taken. These include Environmental Impact Reports (EIRs) and other environmental documents prepared for and certified by Monterey County in 1994-1996.

If the Board chooses to leave the July 21, 2003 Conditions of Approval intact, no additional CEQA review is needed.

DISCUSSION: The staff recommendation is based on the following information and assessments. Note that reference to “Condition #19” herein may refer to a condition that was numbered differently (or unnumbered) in a previous document, but the intent and substance remained unchanged; only minor text refinements may have been made.

q Condition #19 is required in order to comply with MPWMD Rules and Regulations governing water distribution systems. Examples of relevant rules include: Rule 20-C-9; Rules 22-B-7, 8 and 9; Rule 22-C-3; Rules 22-D-1(b) and (h); Rule 22-D-2 and Rule 22-E. Exhibit 21-E provides Rules 20 through 22 for reference.

q Condition #19 was created at the request of the applicant as a means to be responsive to the applicant’s stated concerns about economic hardship. Condition #19 was developed after an April 24, 2003 meeting with the applicant in order to be responsive to his concerns about economic hardship associated with difficulty selling homes if the potable water system was not permitted in the very near future. At that time, it was believed that State and Monterey County health authorities would approve the potable system by Summer 2003. To date, the system is not operational.

On March 26, 2003, MPWMD staff had asserted in a letter (Exhibit 21-F) that one application with all alluvial/non-alluvial and potable/non-potable components must be submitted in order for the application to be complete. The applicant requested a meeting with the Acting General Manager (Fran Farina) regarding this issue, which occurred on April 24, 2003. At that meeting, the concept of a phased application was discussed and all concurred. The alluvial component would be heard first (June-July 2003) and the non-alluvial components would be addressed later, within a reasonable period of time. In a letter dated May 1, 2003 (Exhibit 21-G), the applicant confirmed his concurrence with this concept. The MPWMD also confirmed acceptance of this concept in a letter dated May 15, 2003 (Exhibit 21-H).

q The applicant previously agreed to Condition #19 with full knowledge of its contents. Concurrence with the Condition was expressed in writing (Exhibit 21-G) and verbally. The applicant (represented by Michael Waxer) confirmed acceptance of the conditions on June 16, 2003 as described in the minutes (Exhibit 21-C). The tape recording of the July 21, 2003 public hearing meeting includes confirmation of concurrence by the applicant, represented by Michael Waxer, regarding Condition #19 and other conditions as refined by the Board at the meeting. In a letter dated August 18, 2003 (Exhibit 21-I), the applicant again acknowledged Condition #19 and requested application materials for the CWWDS#2 system in their initial “effort to fulfill Condition #19.”

q Condition #19 is a reasonable application of MPWMD Rules and Regulations. The applicant is not treated differently than any other applicant since the passage of Ordinances No. 96 and 105. The regulations governing water distribution systems are more stringent and require more comprehensive, accurate information than in the past. Any amendment to any water system as defined by Ordinance No. 96 since April 2001 triggers compliance with Rules 20 through 22 as amended by Ordinances No. 96 and 105. Because the CWWDS#1/CWWDS#2 system is a complex, interlinked system with multiple sources of water, interties to other systems such as Monterra WDS, dual meters to track water transfers in and out of the Carmel River watershed, and other complexities not shared by most systems, the information requirements for Cañada Woods are greater than most systems, which typically are comprised of one or two wells drawing from one water resource. Only the main Cal-Am system rivals the Cañada Woods system in complexity and information requirements are similar.

Compliance to Date with Condition #19 -- CWWDS#2 (Application #20030930CWW)

Condition #19 requires submitting an application for the non-alluvial components of the system (i.e., CWWDS#2). To date, Application #20030930CWW has been deemed as incomplete, partly due to very vague answers to questions about estimated water use. Examples of answers include:

· “The number of connections will vary as needed;” and

· “Expect water use to vary from year to year.”

In the subsequent communications between the applicant and MPWMD regarding compliance with Condition #19 and the completeness of Application #20030930CWW for CWWDS#2, no information about economic hardship, lack of resources or other compelling reason is given as to why the requested information, or at least a good-faith estimate of a numerical range, could not be provided. The applicant appears simply to not want to provide the information required by MPWMD Rules and Regulations.

The applicant’s May 7, 2004 letter (Exhibit 21-B) asked to appeal the General Manager’s determination of an incomplete application for the CWWDS#2 system. If Condition #19 is removed, the issue of whether the non-potable system application is complete or not becomes moot, as it would not be required. If Condition #19 is not removed, the appeal request will be processed following MPWMD procedures. The completeness of the CWWDS#2 application is not the subject of the Board’s June 21, 2004 action.

It is also notable that none of the immediate follow-up actions required by Rule 22-D to be performed by an applicant to enable issuance of a valid permit were carried out. These include: paying final permit fees, signing a standard Indemnity Agreement, and signing the Acceptance of Permit Conditions form. To date, a valid, signed permit has not been issued for the CWWDS#1 system.

EXHIBITS:

21-A Final Conditions of Approval and Findings of Approval adopted on July 21, 2003

21-B May 7, 2004 request by applicant to delete Condition #19

21-C Minutes for June 16, 2003 public hearing

21-D Minutes for July 21, 2003 public hearing

21-E Excerpt, MPWMD Rules and Regulations, Rules 20-22

21-F Letter from MPWMD to applicant dated March 26, 2003 regarding incompleteness

21-G Letter from applicant to MPWMD dated May 1, 2003 concurring with conditions

21-H Letter from MPWMD to applicant dated May 15, 2003 concurring with conditions

21-I Letter from applicant to MPWMD dated August 18, 2003 requesting forms

Provided to Board under separate cover:

· Staff note from July 21, 2003 Board meeting: Public Hearings – Item 17. Consider Application to Amend Cañada Woods Water Distribution System Permit. Includes June 16, 2003 staff note for same item.

· Excerpts of Environmental documents associated with Cañada Woods prepared by Monterey County.

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